The paper "The Strategic Role of Organizational Learning in Creating Competitive Advantage" is an outstanding example of a management literature review. With the growth of information technology and the new economy, concepts like organizational learning, knowledge management, knowledge economy and learning organization are increasingly becoming commonplace in management literature. Especially in the sphere of information technology and other knowledge-intensive industries, intellectual capital rather than other scarce resources like physical capital and labor, has come to be the crucial determinant of creating a competitive advantage for the organization. Hence, the stress has moved from the distribution of a given set of scarce resources, typically labor and physical and financial capital, to the creation, allocation and distribution of scarce resources like knowledge.
The process of knowledge creation and distribution, however, is socially determined and dependent on the interactivity of the institutional framework in which the organization operates. The literature on the organization emphasizes the cognitive processes within the organization as well as the interaction with rules and routines of related organizations. In this paper, I will review the academic literature on different categories of organizational knowledge, the difference between organizational learning and learning organization, knowledge management and the effect of organizational learning on competitive advantage.
Finally, I will review the gaps in academic literature and recommend some new lines of research. The purpose of this paper is to link the theoretical and methodological literature in order to create a guideline for the development of the competitive advantage of an organization. Organizational knowledge In the literature on knowledge management and organizational learning, knowledge is seen as the crucial parameter that leads to competitive advantage.
Drucker said in his seminal work in 1964, said: “ What does make a business distinct and what is its peculiar resource is its ability to use knowledge to social, economic and managerial advantage” (quoted in Blackman and Henderson, 2002).
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